Goldman Sachs (India) Finance Pvt. Ltd. Vs Assessment Unit (ITAT Mumbai)
ITAT Mumbai held the disallowance on basis that the ESOP expenses is contingent in nature cannot be sustained. However, amount claimed as expenditure, the basis of allocation of ESOP cost by GSGI etc., needs to be factually examined. Hence, matter remanded.
Facts- The assessee is a private limited company and is a non-deposit taking non- banking finance company (NBFC). The case was selected for scrutiny and the statutory notices were duly served on the assessee. AO completed the assessment by making disallowance of depreciation component in Occupancy Expenses under section 32(1) – Rs. 35,18,927/-; disallowance of ESOP Expenses – Rs. 1,89,23,119/- and disallowance of reversal of provision for gratuity – Rs. 13,86,724/-.
CIT(A) confirmed the disallowance of ESOP Expenses and deleted the disallowance made towards reversal of provision for gratuity. With regard to the disallowance of depreciation on Occupancy Expenses the CIT(A) enhanced the disallowance to the entire amount allocated by Goldman Sachs India Securities Pvt Ltd (GSISPL) assessee’s group entity towards Occupancy Expenses to the assessee to the tune of Rs. 1,87,40,284/-.
Conclusion- Held that the only reason for making the disallowance is that the assessee has not submitted any supporting documents or the basis of cost allocation by GSISPL. The ld. AR during the course hearing submitted that the details called for pertain to the group entity and therefore the assessee needed time to collate the details which was not provided by the lower authorities. Accordingly the ld AR prayed for one more opportunity to submit the relevant details called for. Considering the facts and circumstances of the case, we see merit in the plea of the assessee that details called for is time consuming to collate and accordingly in the interest of natural justice and fair play we deem it fit to remit the issue back to the AO. The AO is directed to examine the impugned issue afresh by calling for necessary details and decide on merits in accordance with law. The assessee is directed to furnish the details as may be called without seeking unnecessary adjournments and cooperate with the proceedings. It is ordered accordingly.
